USD/CAD fell sharply in the month of March. What is the outlook for the pair?
Here is their view, courtesy of eFXdata:
“The Canadian dollar is getting hit from all angles possible and was the 3rd worst performing G10 currency in March, declining 4.7%. As one of the central banks in the G10 space that was slower to ease ahead of the COVID-19 crisis, it therefore became more aggressive than most in terms of rate cuts – the BoC cutting 150bps in March. Not only that but CAD had the plunge in crude oil prices to contend with and also bordering the country with the largest number of virus cases in the world,” MUFG notes.
“Our oil outlook is likely to act as a drag on CAD certainly over the short-term. We certainly see scope for CAD to be a laggard in the G10 space through this crisis given the oil element and the proximity to the US where the COVID-19 crisis is escalating. So our USD/CAD profile lower as the crisis eases is somewhat softer to reflect the greater negatives for Canada,” MUFG adds.
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